Longer term view on building approvals more encouraging: HIA

Larry SchlesingerDecember 7, 2020

For once the HIA has not called for an interest rate cut in a press release, instead focusing on the more positive long-term trends in today's building approvals data.

Well it did at least in its first press release on today's data which had as it headline "Lift in Building Approvals Reflects Improved Sentiment".

A corrected press release issued a minute late took a decidely downbeat tone: "Sharp Decline in Building Approvals Underlines Delicate State Of Housing Industry," it read.

Perhaps readers can take their pick.

Both press releases began with the statement that approvals for houses and units fell 5.5% over March, below expectations of a small rise.

“This is the largest monthly decline in building approvals since July of last year and represents adisappointing reversal of the growth which occurred in February,” said HIA senior economist, Shane Garrett.

“The decline in approvals for units was particularly pronounced in March with a fall of 7.7% to ccurring. This is in comparison to the 4.1% decline in detached house approvals during March,” Garrett said.

But he said (in both press releases)  that when taking a "longer view" the picture is a "little more encouraging"

"Approvals in March were 3.9% higher than twelve months previously.

For the first quarter of 2013, total approvals rose by 8.8% compared with the same period in 2012,” noted Garrett.

“The sharp decline in approvals during March underlines the delicate state of Australia’s housing market. A tentative recovery does appear to be underway but it remains delicate,” said Garrett.

“Every positive indicator on housing seems to be quickly followed by negative data in relation to other aspects of the market.

"The government must bear this in mind when prescribing policy measures. The housing industry is in a sensitive state and the need for supportive action from government at this time is great.

"There remains huge scope for policy intervention, especially with regard to inefficient taxes on housing.

"We urge the government not to ignore these opportunities in the Budget tabled for later this month,” said Garrett. 

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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